2018-03-02

Speculative Top: Bitcoin Search, Transaction Volume Falls


Bloomberg: Bitcoin's Plunge in Volume Stirs Questions About Its Usage
Earlier this year, when Bitcoin’s price fell by more than 60 percent from its record close, a less-noticed Bitcoin figure also plunged: the number of daily transactions.

There are many explanations for the fall-off in trading, from software- to news-related. What’s less understood is why the level hasn’t recovered as Bitcoin’s price made a 50 percent comeback since Feb. 5. That’s left some investors wondering whether the cryptocurrency is waning in popularity.

The average number of trades recorded daily has roughly dropped in half from the December highs and touched its lowest in two years last month, even as Bitcoin became a household name and roared back to near $11,000.

The transaction data may be bad news for Bitcoin bulls, according to Charles Morris, chief investment officer of Newscape Capital Group in London, who invests in cryptocurrencies. Trading and purchases on the Bitcoin network, which can be measured by metrics like transaction volume, is indicative of price direction, he said.

...Transactions plunged from a seven-day average of almost 400,000 in mid-December to about 200,000 this week, according to research firm Blockchain.info. The last time it was this low, the currency traded below $500.
It was a speculative bubble. "Everyone" was talking about Bitcoin when it was running towards $20,000 in December. Now, not so much.

No comments:

Post a Comment